Rupert Murdoch will be chairman of both News Corp companies. Photograph: William West/AFP/Getty Images

12.03pm BST (07.03am ET): Rupert Murdoch is shortly expected to announce the historic split of his global media group into two separate companies.

The News Corporation chairman is likely to announce that his publishing assets – which include the newspaper company behind the Sun, Times and Sunday Times – will be spun off from his TV and film business, which includes the Fox movie studio and its 39.1% stake in BSkyB.

The move will be the biggest corporate upheaval at News Corp since Murdoch founded the firm in 1979.

News Corp is expected to announce the plans early on Thursday in New York, meaning around lunchtime in the UK.

Murdoch will give an exclusive interview to Fox Business at 10am eastern standard time – 3pm UK time – which we will cover live here, along with all major developments as News Corp is formally split in two.

The entire process of spinning off its publishing assets is expected to take about a year, the WSJ reported.

Key details, including who will run the publishing business, were yet to be finalised after a board meeting at News Corp's headquarters in New York on Wednesday evening, according to the paper.

12.16pm BST (07.16am ET): Three banks have been hired to advise News Corp on the restructuring, with the possibility of a fourth bank in the shape of Murdoch's long-time adviser Allen & Co, the Guardian's Lisa O'Carroll reports.

Goldman Sachs, JP Morgan Chase and Centerview Partners have been hired to advise the media conglomerate, a person familiar with the matter told Fox News.

The advisers will have responsibility for guiding News Corp through a potentially complex separation process, which will include determining how to manage the company's current $10bn share buyback programme and how to divide its considerable balance sheet and other global assets.

It wasn't clear if boutique investment bank Allen & Co, a long-time adviser to News Corp, would play a role in any separation. Allen & Co banker Stanley Shuman is a director emeritus on the News Corp board.

Representatives for Goldman Sachs, JP Morgan, and Centerview didn't immediately respond to requests for comment. A spokeswoman for Allen &Co declined to comment.

12.35pm BST (07.35am ET):News Corporation has confirmed that it is to split its publishing business from its TV and film business. More news as we get it…

12.37pm BST (07.37am ET):Rupert Murdoch will be chairman of both the publishing and entertainment companies, but only chief executive of the entertainment business.

News Corp has not announced a chief executive for its publishing assets, which include the the Sun, Times and Sunday Times.

The separation is expected to take 12 months to complete.

The the News Corporation building in New York. News Corporation is splitting its enternatinment and publishing businesses into two entities. Photograph: Andrew Gombert/EPA

12.38pm BST (07.38am ET): Here is News Corp's announcement in full:

News Corporation today announced that it intends to pursue the separation of its publishing and media and entertainment businesses into two distinct publicly traded companies. Upon closing of such a transaction, shareholders would hold interests in a world-class publishing company, consisting of the largest collection of best-in-class publishing assets and a new digital education group, and an unmatched global media and entertainment company, each of which would benefit from enhanced strategic alignment and increased operational flexibility with respect to an unparalleled portfolio of assets, brands and franchises.

The proposed transaction would create global category leaders in both publishing and entertainment: a publishing company, which would be comprised of News Corporation's newspapers and information businesses in the US, UK and Australia, the company's leading book publishing brands, its integrated marketing services company, its digital education group, as well as its other assets in Australia; and a global media and entertainment company, which would encompass News Corporation's broadcast and worldwide cable networks, leading film and television production studios, television stations and highly successful pay-TV businesses in Europe and India.

"There is much work to be done, but our board and I believe that this new corporate structure we are pursuing would accelerate News Corporation's businesses to grow to new heights, and enable each company and its divisions to recognise their full potential – and unlock even greater long-term shareholder value," said Rupert Murdoch, chairman and CEO of News Corporation. "News Corporation's 60-year heritage of developing world-class media brands has resulted in a large and unparalleled portfolio of diversified assets. We recognise that over the years, News Corporation's broad collection of assets have become increasingly complex. We determined that creating this new structure would simplify operations and greater align strategic priorities, enabling each company to better deliver on our commitments to consumers across the globe. I am 100% committed to the future of both the publishing and media and entertainment businesses and, if the board ultimately approves a separation, I would serve as chairman of both companies."

News Corporation believes that a separation of the businesses into distinct public corporations with their own identities and strategies would enhance overall shareholder value and allow each company to:

• Focus on and pursue distinct strategic priorities and industry-specific opportunities that would maximise their long-term potential.• Benefit from greater financial and operational flexibility and better position each company to compete.• Respond and react more quickly to rapidly-evolving technology and global market opportunities. • Tailor its capital structure, and allocate and deploy resources in a manner consistent with its strategic objectives that best enhances value for its respective shareholder group.

With more focus devoted to each business' financial and operational structure, investors would be able to more clearly evaluate the inherent value of both portfolios of assets and invest in each company accordingly.

The new global media and entertainment company that would be created through the proposed transaction would consist of News Corporation's highly-profitable cable and television assets, filmed entertainment, and direct satellite broadcasting businesses, including Fox Broadcasting, 20th Century Fox Film, 20th Century Fox Television, Fox Sports, Fox International Channels, Fox News Channel, Fox Business Network, FX, Star, the National Geographic Channels, Shine Group, Fox Television Stations, BSkyB, Sky Italia and Sky Deutschland, among others. As a pure-play content producer and distributor, the Company would build on its deep heritage in developing incredibly strong, premium content for distribution on screens of all sizes by leveraging its leading content across its entertainment and cable news verticals, as well as its unparalleled collection of regional sports networks, and the industry's leading movie and TV production and distribution company. In addition, the entertainment company would benefit from its rapidly growing, high-margin cable network and pay-TV assets, and the distribution capabilities and opportunities associated with its unrivaled global footprint with significant scale across North and South America, Europe and Asia.

The new global publishing company that would be created through the proposed transaction would consist of News Corporation's current publishing businesses, as well as its book publishing, education and integrated marketing services divisions. The new publishing company would create a scaled publishing platform that would be one of the best capitalised in the industry. The publishing company would have the opportunity to leverage its trusted brands for innovation and value creation across all traditional and digital platforms. The publishing company would incorporate some of the world's most successful print, digital and information services brands including Dow Jones, the Wall Street Journal, Dow Jones Newswires, HarperCollins, the New York Post, and the Daily, as well as offer the rich diversity of assets in Australia, including leading brands such as the Australian, the Herald Sun, the Daily Telegraph and the Courier Mail. In addition, the company would include the Times, the Sun, the Sunday Times, as well as News Corporation's integrated marketing services group and its ground-breaking digital education group, including Wireless Generation. With a balanced portfolio of stable and growing news publishing brands and other assets, shareholders would benefit from strong and consistent free cash flow generated by these businesses, over multiple platforms.

Upon closing of the proposed transaction, News Corporation's shareholders would receive one share of common stock in the new company for each same class News Corporation share currently held. Following the separation, each company would maintain two classes of common stock: class A common and class B common Voting Shares.

Upon closing of the proposed transaction, Rupert Murdoch would serve as chairman of both companies and CEO of the media and entertainment company. Chase Carey would serve as president and COO of the media and entertainment company. Over the next several months, the company will assemble management teams and boards of directors for both businesses.

The separation is expected to be completed in approximately 12 months. Management is developing detailed plans for the board's further consideration and final approval. To execute the transaction requires further work on structure, management, governance, and other significant matters. After receiving final approval of the board of directors, News Corporation will convene a special shareholder meeting to consider the transaction. This meeting is not expected to take place until the first half of calendar 2013. During the closing process, News Corporation will remain focused on delivering the best possible results for the benefit of its consumers, customers and shareholders.

In addition to shareholder approval, the completion of the separation will also be subject to receipt of regulatory approvals, opinions from tax counsel and favorable rulings from certain tax jurisdictions regarding the tax-free nature of the transaction to the company and to its shareholders, further due diligence as appropriate, and the filing and effectiveness of appropriate filings with the US Securities and Exchange Commission. The company will provide interim updates as appropriate. There can be no assurances given that the separation of the company's businesses as described in this announcement will occur.

1.01pm BST (08.01am ET): The surprise in News Corp's announcement is that Rupert Murdoch will, for the first time in 60 years, not directly run the company's global stable of newspapers. He will be chairman of the new publishing business, but that is likely to be seen as a ceremonial role compared with his close involvement with his newspapers in the past.

1.02pm BST (08.02am ET): The news will spark speculation about who is likely to take over News Corp's publishing business, which includes the Wall Street Journal, Dow Jones, newspapers in the UK and Australia, as well as its education assets. News Corp's search for a newspaper chief executive comes at the same time as the New York Times Company's own recruitment process. It would be an unlikely candidate that would interview for both roles

It is with much enthusiasm and personal pride that I share with you today's news regarding our plan to drive towards the next, transformative phase of this organisation you and I have built together into one of the largest, most innovative media companies of our time.

That very size and breadth has created an opportunity to separate News Corporation into two global leaders in their own right -- we will wow the world as two, as opposed to merely one.

I believe our leadership is born out of a spirit of innovation. We have never accepted the status quo. We have always been driven by the belief that we can do better – deliver a better product for our audiences and provide better performing businesses for our shareholders. Our success has come from our speed, flexibility and creativity in responding to changing markets, in combination with our commitment to serving our customers' needs.

Our publishing businesses are greatly undervalued by the skeptics. Through this transformation we will unleash their real potential, and be able to better articulate the true value they hold for shareholders. Our aim is to create the most ambitious, well-capitalised and highly motivated publishing company in the world, consisting of the largest collection of our news and publishing brands, as well as our groundbreaking digital education group; we will also work to create the world's top media and entertainment company, encompassing our premier broadcast and cable networks, leading film and television production studios and highly successful pay-tv businesses.

Much of our foundation already exists – because of you. We have the creative minds. We have the assets. We have the brands. But we must realign and reorganise in this moment of opportunity so that we can heighten our focus and be faster, more nimble, and more adaptable to change. When we began this journey 60 years ago in Adelaide, we made a commitment to provide great journalism, while also entertaining our consumers. In news, information, data, literature, and digital content, no company has devoted the resources, the passion, or enjoyed the success we have. That will not change. The most important guarantee to free societies, free markets and free minds is free speech. Knowledge has changed the course of history in every society, and we believe that being a creator and distributor of information is not just the right thing to do, it's good business. The failure of other publishing companies to embrace the future has itself created opportunities for us around the world. Our publishing company will deliver on the promise of a well-informed society as we aggressively grow our business across borders and new global platforms.

On the media and entertainment side, we have a reputation for inspiring and entertainingms of imaginations every day. We have a history of empowering truly visionary, creative talent to take chances that have redefined the landscape again and again. Today, our creative content businesses have never been stronger. Our distribution assets, globally, are on full throttle. These businesses, at the core of an independent media and entertainment entity, will innovate and grow even faster.

The most valuable commodities in the world today are information, analysis and education, with infinite potential through the growth of technology and digital platforms to accelerate the improvement of world living standards.

Today there are 30m tablets in use in the US and 75m worldwide. In five years' time, there will be at least 75m tablets in the US and 375m in the world. Smartphones will get far smarter and grow rapidly over the next 5 years, from 120m active phones to 225m in the US, and from 835m to 1.7bn in the world. These technologies will permeate all parts of life – including education – and it is my firm belief that these two companies will be best positioned to compete in this rapidly evolving global economy and distribute our premium content on these platforms.

Over the years, I have become accustomed to the noise of critics and naysayers...and pretty thick-skinned! Remember what they said when we started the Fox Network, Sky, Fox News and the Sun? These experiences have made me more resilient. And they should you, as well. And time and time again, we persevered, creating new businesses, new products, telling new stories, informing and educating the public in new ways –- and giving jobs to thousands more people.

I am extremely excited by this big change. It is a testimony to our entrepreneurial spirit and determination to educate, inspire and entertainms of families across the globe.

I will personally be leading the creation of our new companies and will serve as chairman of both organisations and as CEO of the media and entertainment company. Chase Carey will continue to partner with me on leading the media and entertainment business, by serving as president and COO. We are busy working on other important details and will inform you as they become available.

Lastly, each of you will make this possible. I will forever be grateful for your loyalty, hard work, creative thinking, and most of all, for your support in making this transition a successful one. We have much work to do as we grasp the great opportunities that lie ahead.

I cannot express how much I appreciate all of your hard work up to this point, and for the promise of your continued creativity as we lay the foundation stones for these two great companies. Each will be unified in their spirit, in their determination, and in their dedication to touching and enhancing lives around the world.

Best regards,

Rupert Murdoch

Tom Mockridge Photograph: Graeme Robertson for the Guardian

1.13pm BST (08.02am ET): Here is the full Tom Mockridge memo to News International staff in London following the announcement:

Dear colleagues,

Rupert has now told you about the exciting changes to our parent company, News Corporation.

Our future here at News International is now as part of the largest newspaper and digital group in the world – with more than 170 titles and some hugely respected and prestigious brands.

Globally we join forces with Dow Jones, the Wall Street Journal and great Australian papers, including the Adelaide Advertiser – in the city where Rupert began the News Corporation story.

In the UK it means joining forces with HarperCollins, recently awarded publisher of the year and with a heritage going back nearly 200 years. They published Dickens back then and their current list is an eclectic mix that captures Stephen Fry, Tony Parsons, Sophie Dahl and the Dalai Lama.

These are challenging times for our sector but we have proved ourselves time and again to be market leaders and pioneers in our field. I see a bright future, though the pressure to ensure our journalism is compelling and our business practices and procedures robust will be greater than ever.

Implementing this change will take about 12 months. There are complex regulatory, commercial, managerial and practical issues to navigate whilst we continue with the daily task of producing and selling papers.

Rupert will be taking questions on this at 3pm today on Fox Business News. He will also visit us in the near future.

I am hoping to see as many of you as possible over the next few days to answer any questions you may have about this and the price rise we are implementing next week on The Sun and the Sunday Times.

All the best,

Tom Mockridge

1.21pm BST (08.21am ET): Lisa O'Carroll reports that Surrey police officers who were hunting Milly Dowler's killer have been referred to complaints body the IPCC for alleged failure to investigate News of the World for hacking her phone.

Mark Lewis, the solicitor for the Dowler family, said he welcomed the referral of Surrey's deputy chief constable Craig Denholm to the IPCC over hacking.

"The Dowler family welcomes the proper investigation of what happened at Surrey police 10 years ago. They regret that the passage of time means that some individuals can now no longer be investigated. The family have no further comment to make at this time."

1.33pm BST (08.33am ET): Several Guardian correspondents are listening in to News Corporation's conference call with Rupert Murdoch right now. We will bring you updates as we have them.

1.34pm BST (08.34am ET):Rupert Murdoch begins the call by describing today as an "exciting day" and one of "great pride for me personally". It is the culmination of more than three years of reviews by News Corp into managing the business. "It is the logical next step in our evolution," he says.

1.37pm BST (08.37am ET): Murdoch says the move will create "two best in class companies". The entertainment business, he reminds us, includes very profitable TV and movie companies such as Fox and BSkyB.

1.38pm BST (08.38am ET):The newspaper business, which includes the Sun and the Wall Street Journal, is of "unparalleled scale and breadth", Murdoch says.

"I'm convinced that as separate entities both businesses will be able to reach new heights … make no mistake, my contention applies also to the global publishing business," Murdoch says.

He says naysayers could "not be further from the truth" and the separation will "unlock the shareholder value that investors deserve".

The publishing company will have a "robust net cash position," he adds.

"I look forward to the future of both these world-class companies," Murdoch says.

1.44pm BST (08.44am ET): Murdoch is now open to questions. Why is the move being made now? "I felt we were making great progress and I still think we are," Murdoch answers.

He says other companies have done well out of splitting up companies. "It's a very big move and a very big decision for me," he adds. "This is not a fait accompli. There are a lot of steps to take."

1.50pm BST (08.50am ET):"The answer is one word, it's digital," says Murdoch, bullishly, when asked about structural decline in the publishing industry. He is adamant that people will pay for news online.

1.51pm BST (08.51am ET): One analyst asks about the capital structure of each spun-off company.

Dave Devoe, News Corp's chief finance officer, doesn't have any detail to share further that Murdoch's contention that the publishing firm will have a "robust net cash position".

1.52pm BST (08.52am ET): News Corp's Devoe says "we have no changes in the plans we've talked about on BSkyB" when asked whether this move makes it more or less likely they will revisit a full takeover of the company.

1.53pm BST (08.53am ET): Murdoch suggests that News Corp will look at internal candidates only for the chief executive of its publishing business.

He says "we have a wonderful group of managers in the whole company to choose from. This is going to take many months to complete and we're in no hurry to make a decision on that".

• News Corporation has confirmed that it will spin off its publishing business from its TV and film companies. Murdoch expressed "great pride" at the historic separation of News Corp into two companies.

• Rupert Murdoch will step back from his newspapers for the first time in 60 years, but will be chairman of both new companies. "It's a very big move and a very big decision for me," he adds. "This is not a fait accompli. There are a lot of steps to take."

• The move was not linked to the News of the World phone-hacking scandal, Murdoch said. "It is not a reaction to anything in Britain," he said, witthout mentioning the scandal directly.

• Murdoch suggested in an analyst call that only internal candidates will be considered for chief executive of the publishing business. "We have a wonderful group of managers in the whole company to choose from," he said in a conference call with analysts.

• Murdoch will give an interview to Fox Business News at 3pm BST (10am ET).

2.58pm BST / 9.58am ET: Tom McCarthy in New York here. We're waiting for Rupert Murdoch to appear on Fox Business – he's scheduled for 10:45 am ET – to talk about his new companies and answer questions about the split.

Lisa O'Carroll notes that shares in News Corp barely budged on the announcement, a reflection of the fact there were no big surprises. Shares were down slightly, 0.63%, in early trading at $22.17.

In the UK, shares in BSkyB rose slightly, by 0.51% to 685p, on the FTSE 100. News Corp's Chase Carey said in an analysts call in the past hour that the move does not make it more or less likely that the company's will revive its bid for the remaining shares in BSkyB.

BTIG's Rich Greenfield asked Murdoch what made him so confident, and he said "in a word: digital." He said he was convinced news remained a valuable commodity and the "naysayers" would be proven wrong.

BTIG values the new publishing firm at $1 and the soar-away Foxtastic media firm at $29. Greenfield told me he was impressed by Murdoch's belief that he could grow the value of the business.

"Time will tell. The market has a very different view to Rupert about the value of the sort of assets you work for," said Greenfield.

3.31pm BST / 10.31am ET: Most everyone sees the overwhelming international embarrassment (not to mention serious legal hazards... and general rottenness) of the News of the World phone hacking scandal as having contributed to pressure on Rupert Murdoch to spin off the News Corp publishing business.

Not so, Murdoch said today. The split has nothing to do with that unpleasant episode.

Deputy Chief Constable Craig Denholm, who was in overall charge of Operation Ruby – the investigation into the girl's disappearance in March 2002 – is to be the subject of an independent investigation by the police watchdog.

The inquiry centres on allegations that Denholm knew Milly's phone had been hacked by the News of the World in 2002 and did not act. Surrey police and the police authority referred his conduct to the IPCC on 21 June and the police watchdog announced on Thursday it would be carrying out an independent investigation.

"I think it's been shown that it's going to add tremendously to the national budget. I'm just worried that this entitlement culture – we've seen where it's taken Greece, we've seen where it's taken France and Spain."

Neil Cavuto is interviewing Murdoch. He looks downright terrified.

3.57pm BST / 10.57am ET: Cavuto asks Murdoch about the timing of the announcement. Was it timed to the SCOTUS decision on health care to obscure the news?

"No no we're not that good at planning. We wanted to do it this week. WE thought on a Friday is bad because it wouldn't get reported. And next week there's the fourth of July in there.

"I've been getting advice from both sides."

Q: From Chase Carey? Devoe?

"What brought me to it was, after 58 years building a company, gradually, I realized the logic of it, and how all the companies would be better managed, we'd be a lot better in every way."

Q: Who'll run the publishing business?

"WE don't know yet. We have great division heads... we've got really great management right across the whole company. Maybe we'll take someone from Fox News.[ Ha ha]

Q: Hacking scandal. Is this a way to keep litigation on the publishing side?

No nothing to do with it at all. At All. This is not any reaction. This is looking forward to what's looking best for the company, for our shareholders.

Q: BskyB. You're [News Corp is] under investigation for being unfit to lead it [BSkyB]?

"No regulator said that at all. A number of people on a parliamentary committee threw that in. When asked if they had any evidence, they said not."

"There are billions and billions of dollars, and if Britain didn't want 'em, there are plenty of good places to put them here!"

"We've got things to be very bullish about in this country."

4pm BST / 11am ET: Cavuto actually drew Murdoch out quite well there. He pushed him on whether News Corp's problems in the UK have led to the split. He pressed him on the failed BSkyB acquisition, asking if the split was a way to make another run at the broadcaster.

Which pushes Murdoch (whose eye-glasses appear to be suffering a terminal fogginess issue, maybe from the heat coming out of his ears) to say:

"There are billions and billions of dollars, and if Britain don't want 'em, there are plenty of good places to put them here!"

Murdoch answers: "If taxes go up and so on we'll have less cash. And my own feeling is if that happens, the economy will slow down, or not get much better than it is today... Not that other things won't be going on.

Q: Finally, quickly... and you've been very patient. [Cavuto senses Murdoch's impatience but, blessedly, his journalistic instincts get the better of him]. The question is, what about your sons? WIll there be future roles for Lachlan and James?

I have daughters, too, Murdoch points out. Of Lachlan and James, he says, "Well, they have to earn it. And have to want it. Lachlan is very happy running his own business in Australia--and he loves living there."

Q: SO [Lachlan is] not going to run the new publishing company?

Murdoch: "I think that's highly unlikely."

[Super-uncomfortable silence.]

"Thank you Mr. Murdoch."

Murdoch seemed angry, annoyed with Cavuto. His answers grew shorter and shorter and his smile grew tighter and tighter. Is Cavuto still employed?

• The decision to dump the publishing arm of News Corp into a separate business had nothing to do with the phone-hacking scandal and is not a move to insulate the profitable body of News Corp from litigation that might now affect the gangrenous newspaper arm. "No nothing to do with it at all. At All. This is not any reaction. This is looking forward to what's looking best for the company, for our shareholders."

• The split is not a way to take another run at BSkyB. In fact, if BSkyB doesn't want News Corp money, that's just fine. In fact, we're not that excited about investing in Britain anyway. America's where it's at now, don't you know: "There are billions and billions of dollars, and if Britain didn't want 'em, there are plenty of good places to put them here!"

Rupert Murdoch. Photograph: Getty Images

• Lachlan Murdoch is not on deck to run the new News Corp publishing business: "I think that's highly unlikely. ... Lachlan is very happy running his own business in Aurstralia--and he loves living there."

The company's shares have soared about 11% over the last two days but slipped today, and are now down 1.79% at $21.91. The Dow Jones Index (another Murdoch company) is down over 145 points at the moment following Obama's Supreme Court victory (of which Rupert does not approve) – so it's not really a reaction to the split news.

A summary of Rupert Murdoch's rather pugnacious interview on the decision is here. Our breakdown of what the two new companies will look like is here. The full News Corp statement on the split is here. And our reporting on a conference call Murdoch held this morning, in which he dismissed any notion that the decision to divide was made under adverse pressures, is here.